Roosevelt to reopen as demand softens for luxury hotels

by
Jaquetta White / The Times-Picayune

Saturday November 01, 2008, 12:00 PM

Eliot Kamenitz / The Times-PicayuneRenovations under way at the Roosevelt Hotel should make it one of the premier hotels in the city. The Roosevelt is scheduled to open June 1 under a Waldorf-Astoria flag.

Construction on Canal Street's Roosevelt Hotel is seven months from completion, but its opulence already is evident.

Suites the size of some homes, private hallways and a 30-foot-plus-high ceiling are all taking shape within the downtown hotel. Those and other renovations are part of an effort to make the historic building one of the most upscale hotel properties in the city.

"With the gamut of things we have done or are doing in this hotel, it will be the nicest hotel in the city of New Orleans," said Tod Chambers, the Roosevelt's general manager.

But the Roosevelt will open at a time when demand for luxury hotels is falling. Revenue per available room at luxury hotels -- a measure of profitability -- fell 14 percent in the week ending Oct. 18, compared with the same week a year ago, according to a report by Smith Travel Research.

The decline stems from cutbacks being made by the corporations whose group meetings drive business at swank establishments.

Still, the Roosevelt's owner and general manager are betting that the hotel will escape the drop similar properties are facing, in part because New Orleans still is rebounding from Katrina but also because the hotel will be affiliated with the renowned Waldorf-Astoria brand.

When it opens June 1, the Roosevelt will replace what had been the Fairmont New Orleans Hotel. Katrina dumped 10 feet of water into the buildings s basement, destroying all the mechanical equipment, and wind-driven rain also inundated most guest rooms.

The iconic, 115-year-old downtown property did not reopen after the storm and was sold for $19 million in August 2007 to Dimension Development Company of Natchitoches, which then contracted with the Hilton Hotel Corp. to add the hotel to its upscale Waldorf-Astoria portfolio.

Hilton announced earlier this year that the hotel would reopen as the Roosevelt, the name it held from 1923 to 1965. Mark Wilson, the hotel's marketing director, is quick to call the work being done a "historic restoration," pointing out that the new Roosevelt will look a lot like the old Roosevelt.

Original chandeliers in the storied Blue Room, which as a nightclub hosted famous musicians, are being cleaned by hand. Carpet in the lobby has been removed to reveal original mosaic tile. Ceilings that had been lowered in the 1960s renovation were restored to heights as high as 35 feet in some places.

As much as the Roosevelt will remind guests of its former self, it also will be identifiable as a member of the Waldorf-Astoria collection. The Waldorf-Astoria, a famous New York City hotel on Park Avenue, is known for both its high-end luxury and its art deco design.

The Roosevelt has 500 rooms, making it slightly smaller than its predecessor, but it has more suites. Seven of them are full-service "master suites" that range in size from 1,400 to 1,800 square feet.

The Roosevelt will include the Waldorf's signature Spa Guerlain. A 13-foot-tall art deco sign atop the building will announce its presence.

The hotel is targeting business travelers. About 75 percent of the guests are expected to be people in town for corporate meetings, Wilson said. In an effort to appeal directly to that group, the Roosevelt's massive ballrooms have been outfitted with retractable walls so they can be used as meeting space for convention groups.

The New Orleans Metropolitan Convention & Visitors Bureau has been doggedly vying for this group of travelers. Corporate meetings tend to bring fewer travelers to New Orleans at one time than national conventions do, but the visitors bureau sees them as steady business.

"There's a lot of interest from groups," Wilson said.

Even so, any slowdown of the economy typically results in a reduction in corporate meetings, said Deborah Sexton, president and chief executive officer of the Professional Convention Management Association.

Not only will there be fewer meetings to compete for, but the number of hotels the Roosevelt has to compete against is climbing.

Hotel supply is expected to rise 3.5 percent next year while demand slides 1.1 percent, producing a 4.4 percent drop in occupancy, according to a study by PKF Consulting, which studies the hotel industry. That means Roosevelt could end up competing not only with the likes of the Ritz-Carlton, but also with hotels like the Marriott and Sheraton, which also count corporate meetings as big business.

"On a competitive stance, I think you truly do have some crossover between the luxury and the upscale," said John Williams, director of the Lester A. Kabacoff School of Hospitality, Restaurant and Tourism at the University of New Orleans. "There's always competition there when you see a downturn in the economy."

Chambers downplayed suggestions that the hotel would suffer during the downturn, arguing that its name alone guaranteed a crop of guests.

"The Waldorf-Astoria is a worldwide-known entity," Chambers said. "If we were putting the Roosevelt name out there without that affiliation, it would be different.

"One of the great things about New Orleans is that the economy doesn't have the same peaks and valleys that other communities do," Chambers said.

Some social events and weddings already have been booked, Wilson said.

Williams, too, said he was hopeful that the city's rebounding hospitality industry would help to buffer the hotel from national concerns.

"We are still down a few rooms from Katrina, so we need that critical mass to get those conventions in," Williams said. "I am hopeful that the Roosevelt will be very successful."

Jaquetta White can be reached at jwhite@timespicayune.com or 504.826.3494.